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Sweden is stepping up its military capabilities and exercises with Nato amid concerns over Russia's military resurgence, Defence Minister Peter Hultqvist said on Friday.

"It's a general fact that Russia is carrying out bigger, more complex, and in some cases more provocative and defiant, exercises. We are following that development and are now strengthening our military capability and our international cooperation," Hultqvist told paper of reference Dagens Nyheter.

Sweden, a non-Nato country which has a longstanding tradition of military non-alliance, will increase its exercises with the Alliance, including those on Swedish territory.

Swedish troops will take part in a large Nato exercise in Spain in September, and in Norway in 2018.

The country also took part in Nato's recently completed Baltops exercises in the Baltic Sea.

"We need to keep up with the new reality. It is broadly anchored in parliament that it is important for the United States to be militarily represented in Europe and this is part of the balance," said Hultqvist.

His comments came a day after US think tank Cepa published a report claiming Russia had held exercises with 33,000 troops aimed at practising an invasion of the Swedish island of Gotland in the Baltic Sea, among other sites, from March 21st to March 25th.

Swedish security experts have widely downplayed the risk of a possible invasion, instead interpreting the exercises as a sign of increased posturing from Moscow.

Sweden's defence budget has been cut back drastically since the end of the Cold War, as the military turned its focus away from territorial defence in favour of international peacekeeping missions.

But a June 16th defence ministry proposal to parliament refers, for the first time since the end of the Cold War, to building up the country's defence "to prepare Sweden for war".